Author : Seeba Ramzani

College : School of Excellence in Law , Taramani, TNDALU


This paper aims to discuss about the changes in Labour Laws and its implications on easy of doing business in India. Besides the federal Government, State Government has also commenced in introducing various measures by way of amending Labour Laws. This paper will enlarge the applications regarding the Constitutionality of suspending the Labour Laws by the State Government and the legal as well as Constitutional implications of unprecedented changes on the Labourers, whether it has adhered to The Global Standards of International Labour Organisations and how such changes dilute the Labour rights and result in exploitation of workers.

HIGHLIGHTS: New Labour Law, suspension, Constitutionality, diluting the rights, three Labour codes, impact of such Laws.


1. The National Democratic Alliance Government has now merged 29 central Laws into four code, as it was named a historic step. However, it was historic step for a wrong reason. Since for the first time of post-Independence India, Labour Laws enacted by the Government through Trade Unions and experts has been dismantled in a way of structuring to the trends of Industries and diluting the workers basic rights. Three new Labour codes passed in Lok Sabha is, The Industrial Relation Code Bill,2020, code on Social Security Bill,2020 and The Occupational Safety, Health and Working Condition Code Bill,2020 as the Government seeks to Amalgamate 44 Central Labour Acts into four codes towards simplifying the Labours Laws.


The major issues faced by the Industries now is non availability of Labours and generating demand, without deriving the conceptual support for it the Governments Labour Reforms will not help out. Either it has to focus on Infrastructural facility, Literacy Rate, Human Development Index. The States of Maharashtra, Gujarat, Tamil Nadu has moulded with Foreign Direct Investment not because these States have relaxed Labour Law but because they force on the Supply Capacity, Cheap Materials, Land, better Infrastructure, Port connectivity. To Strengthen Demand, The State has to take both demand and supply side measures. Naturally there were many cases where workers employed overtime and were not given their Duties. Now the Labour Laws have given the Enterprise a free hand which will Neglect all the Responsibility and Accountability towards the Labour, at the end it Exploit the Labours.

The Ministry on Recommendation of Second National Commission on Labour has taken the steps of merging the four Bills. The Global Pandemic has spotted to have great part for the rise of Economic crises. Some States has reported to closure of Factories and Business on account of National lockdown which has been resulted in dawn of Ordinance which at the end dilute the Labour Rights. The Uttar Pradesh Ordinance,2020, suspends the operation of all Labour Laws in State for three years along with the Exception of Bonded Labour System (Abolition) Act,1976 and provisions relating to the Security of Workers under Factories Act,1948, Building and other Construction Workers Act 1996. Larger Organisations and Corporations have shown positive signals to this Labour Bills.


International Labour Conventions are the base which serves for guiding the Labour Laws. India is a founding Member of International Labour Organisation. India has ratified nearly six Conventions, Forced Labour Convention (No.29), Equal Remuneration Convention (No.100), Abolition of Forced Labour Convention (No.105), Discrimination Convention (No.111), worst forms of child Labour Convention (No.182), Minimum age Convention (No.138).[i] India has ratified Tripartite Consultation (International Labour standards) Conventions 1976, which provides Tripartite Consultation process between the Country, Workers, Employer in spite of ILO but these Ordinances are contravention to the ILO Conventions. India has ratified the hours of work (Industry) Convention, 1919 in 1921 which provides a maximum 48 Working hours for a week and present extension to 72 hours is Violative to International Norms. States are bound by the ratification of Labour Conventions.


The State Government is incompetent in promulgating an Ordinance out of its reach, which is ultra vires and unconstitutional for the following reasons,

1. State Government are not Competent to Promulgate such Ordinance in Absence of Delegated Power under Parent legislation:

There are almost 40 Central Laws and 200 State Laws Governing the Labour practise in India. The current issues are, whether The State has the power to suspend Centre Labour Laws, as Labour Laws are part of concurrent list of Seventh Schedule. By the virtue of Article 162, Law making power of The Legislature is Co-Extensive with that of Executive and the Ordinance making is the legislative power of executive. Interpreting the scope of Article 73 and 162 of the constitution, Supreme Court in,

A.P. Public Service Commission v. Baoji Badavath &ors,[ii] held that with respect to the subject matters under List III, the executive function shall ordinarily remain with the States, subject to the provisions of the Constitution or of Parent Law of Parliament. Therefore, in the instant case suspended Labour Laws are Central Acts which has not Delegated any power to the State, hence there is lack of Legislative competency to Promulgate the same.

2. Such Ordinances is Repugnant and it's a Clear and Direct conflict with Centre Labour Legislation under list III:

Article 254(1) explains the provisions relating to Repugnancy, Laws made by Legislation of the State is Repugnant to any provisions of Law made by the Parliament, with respect to any of the matters enumerated in Concurrent list. As this is subjected to Exceptional provisions in clause (2) of this Article. If a State Law is made with respect to any of the matters contained in concurrent list is Repugnant to the provisions of the Law made by the Parliament or an existing Law with regard to that matter then the State Law if it has been reserved for the assent of the President and has received his assent shall prevail notwithstanding such Repugnancy.[iii] This Ordinance has not been promulgated or received any assent from the President yet. However, it's the case of suspension of Labour Laws for Temporary period. This provision to clause (2) can be override by a Subsequent Law passed by the Parliament. If such Law is made then the State Law would be void to the extent of Repugnant with Union Law [iv]

3. The Ordinances is Violative to fundamental rights of the workers under part III.

In Smt Ujjam Bai vs State of Uttar Pradesh,[v] Stated that any Law enacted by the Legislation which is not competent in eye of Law will be Violative to Fundamental Rights. Denial of Fundamental Rights to the Workers is untenable. State Government is in competent authority without the delegated power to Promulgate an Ordinance for suspension of Labour Laws. Owing to the suspension of the Minimum wages Act, any Payments Below The Minimum Wage[vi] amounts to Forced Labour and its Violative to Article 23 and 21 of the Constitution[vii].The Suspension of the Industrial Disputes Act also takes away the Right of Fair Trial.


Uttar Pradesh Cabinet approved the Uttar Pradesh Temporary Exemption from certain Labour Laws Ordinance,2020[viii], to relieve Factories from most Labour Laws for three years. This Ordinance holds all the Labour Laws pertaining to Working conditions, Work Disputes, Labour Union and Other issues. Once the Ordinance gets approval from President, only The Building and other Construction Workers Act 1996, Workmen Compensation Act, 1923, Bonded Labour system (Abolition)Act 1976 and section 5 of Payment of Wages Act 1936 (The Right to Receive Timely wages) will be in force. To enhance The New Industries and Investors for next 1000 days in the State, all the provisions except Section 25 of Industrial Disputes Act has been relaxed.

The Industry Owners can recruit to their Convenience to increase the production and outcome. In Enterprises with less than 100 Workers, Exemption has been given from Madhya Pradesh Industrial Employment Act. Various States opting for such suspend of Labour Laws to attract the Business Enterprise and Investors to their States.

The Up Ordinance is a blanket of suspension of Labour Laws applicable to all kinds of Industries. This allows the enterprise to do what they please to and how they please. The bargaining power of Trade Union, rightful pay or termination compensation will no longer have Legal right to access the Court. As the Government wants to ensure that the New or Existing Industries will flourish out without getting Tangled in any Legal chaos.


Under the Industrial Relation Code Bill,2020, it restricts the rights of the workers to strike. Workers cannot go for strike without 60 days' notice and not while proceeding before the Tribunal. Industrial establishment with 300 or fewer workers will no longer required to furnish standing order. The Social Security Bill, 2020, has initiated a National Social Security Board which will take up the Responsibility of Organising Schemes for unorganised workers like platform workers. Which will include them under the ambit of Social Security Schemes like Disability Insurance, Provident Funds, Health, Skill up gradation. The Occupational Safety Code B ill,2020, though it extends the Working hours for the Labourers, it also enhances a provision for journey allowances which shall be paid to the workers to travel between his native place and employment site.

Legal implications under Factories Act Section 65(2)(3) empowers to amend section 51-52,54 &56. The Number of Working hours in a day should not exceed 12 hours, total number of Working hours should not exceed 60 hours. Each State except Punjab has provided for extension of a total 72 hours in a week which is contraction to section 65. State Government under section 5 of Factories Act, which allows States to exempt Industry unit from looking into the provisions of factories act during a period of" Public Emergency" for the period of 3 month. Public Emergency is a Grave Emergency whereby the Security of India or any part of India is threatened, either by war or external aggression or armed rebellions.

These provisions gives the workers a right without remedy. No New Trade Unions can be registered in State for next three years. Workers will have no access to any Redressal Mechanisms to address their Grievances. The implications from the provisions of Factories Act relating to Maintenance of Hygiene, Health, Basic Amenities and Labour inspections will not be enforceable to the Factories for the period of three months from the date of publication of the notification.


The Industries are given with free hand to pay the wages as per their convenience, follow hire -fire policy to their needs, force long Working hours without proper wages, which even disposes the power of Collective Bargaining. It was held in PEOPLE UNION FOR DEMOCRACTIC RIGHTS VS UNION OF INDIA, it was held that non-payment of Minimum Wages to the workers employed in various Asiad projects in Delhi was a denial to them of their Right to Live with the basic Human Dignity and it was Violative to Article 21 of the Constitution.


The Essence of Federalism lies in the sharing of Legal Sovereignty between Centre and State Government. Article 246 of the Constitution plays a dominant role in Demarcating the subjects between them. Suspension of Labour Laws are not found to be legal, rather there is high risk of misuse of powers. The Government or an Industry to take such actions which promotes the Healthy, Safety of the Worker Men during the period of employment and even after Retirement. The Right to life with Human Dignity encompass within its fold. But the present Labour bills are contravention to the Fundamental Rights enshrined in the Constitution. Apart from the Government point, as it enhances the Future industrial development. The Government can either Restructure the Labour laws with the focus on their infrastructural needs, demand and supply issues which has been a detrimental to the development of industries in today context. This Labour Bills were absolutely controversial to the International Labour Conventions. The Provisions of Various labour laws violated the fundamental right of workers to live with human dignity as the workmen deprived of their rights and benefits. It's Violative to the rule of law and equality before law.

[i] [ii] (2009) 8 SCJ 426. [iii] DR. J. N. Pandey,The Constitutional Law of India, 47th Edition,pg:642. [iv] In Zaverbhai v. State of Bombay [v] (1963) 1 SCR 778 [vi] [vii] PUDR V. UNION OF INDIA(1983) SCR (1) 456. [viii]

86 views0 comments

Recent Posts

See All